* Dollar rallies after U.S. GDP data beats expectations
* Gold retreats from day high hit after data
* U.S. platinum, palladium ETF flows pause
(Updates prices, adds comment)
By Jan Harvey
LONDON, Jan 29 (Reuters) - Gold prices slipped to a session
low of $1,076.85 an ounce in Europe on Friday after data showing
the U.S. economy grew at a faster-than-expected rate in the
fourth quarter boosted the dollar.
The precious metal briefly turned positive after the data
was released, hitting an intraday high at $1,090.10 an ounce, as
sharper risk appetite fuelled buying of commodities, but it
quickly pared gains.
Spot gold <XAU=> was bid at $1,078.90 an ounce at 1504 GMT,
against $1,086.75 late in New York on Thursday. In that session
it hit a near three-month low of $1,073.75.
"At the moment gold is lower because the dollar is
strengthening," said Credit Suisse head of commodity research
Tobias Merath. He added, however, that the data posed further
risks for gold than its effect on the currency markets.
"For gold, positive data is not helpful because the main
risk for gold is from rising real interest rates," he said.
"Real interest rates are the opportunity cost for gold, because
it doesn't give any yield."
"We are now in economic recovery, undoubtedly, and at some
point in the recovery real rates will start rising. That could
be a trigger for more selling of gold."
The dollar rose sharply versus the yen and gained against
the euro after data showed the U.S. economy grew at a faster
than expected 5.7 percent pace in the fourth quarter. []
Strength in the U.S. unit curbs gold's appeal as an
alternative asset and makes dollar-priced commodities more
expensive for holders of other currencies.
On the physical side, Indian gold demand continued to pick
up on Friday as traders took advantage of easing prices to build
stocks to meet upcoming wedding demand. []
Also in Asia, gold bars were offered at the highest premiums
in more than a year as demand from China gained pace ahead of
the Lunar New Year, dealers said. []
ETF HOLDINGS STEADY
Holdings of the world's largest exchange-traded fund, New
York's SPDR Gold Trust, were unchanged for a seventh straight
session on Thursday, the trust's data showed. []
Overall its holdings are down 21.7 tonnes or 1.9 percent so
far this year. In the same period of 2009, they rose 52.65
tonnes or 6.7 percent.
Gold is now looking vulnerable, according to analysts who
study past price moves to determine future trade.
"The close below the 100-day (moving average) at $1,089 is a
first since July 2009 and increases the odds for a deeper probe
of $1,074/1,067 support -- the December lows and ten-month
trendline -- where we would be looking for basing signs," said
technical analysts at Barclays Capital.
Among other precious metals, silver <XAG=> was at $16.07 an
ounce versus $16.20. Platinum <XPT=> was at $1,507 an ounce
versus $1,508, and palladium <XPD=> at $417 versus $418.50.
Buying of the platinum group metals to back new U.S.
exchange-traded funds tailed off at the beginning of this week,
data from ETF Securities, which operates the funds, showed.
BMW <BMWG.DE>, the world's biggest premium automaker,
forecast a modest rise in car sales this year and confirmed it
expected a 2009 pretax profit despite the economic crisis.
[]
Platinum and palladium are heavily exposed to the auto
sector, as they are mainly used as components in autocatalysts.
A recent Reuters poll showed analysts are positive towards PGMs
this year due in part to an expected recovery in car demand.
[]
(Editing by Sue Thomas)
